Gowanus Indus. Park, Inc. v. HESS Corp.
| Decision Date | 31 January 2012 |
| Docket Number | 10-CV-5522 (JG) (JO) |
| Parties | GOWANUS INDUSTRIAL PARK, INC., Plaintiff, v. HESS CORP., Defendant. |
| Court | U.S. District Court — Eastern District of New York |
FOR ONLINE PUBLICATION ONLY
AMENDED MEMORANDUM AND ORDER
APPEARANCES:
HINMAN, HOWARD & KATTELL, LLP
By: Joseph Noah Paykin
Attorney for Plaintiff
PROSKAUER ROSE, LLP
By: Charles S. Sims
Attorney for Defendant
Gowanus Industrial Park, Inc. ("GIP") claims title to certain parcels of land (the "parcels"), including a strip of property approximately 200 feet wide beneath a body of water known as the Henry Street Basin. The Henry Street Basin lies at the end of Henry Street in South Brooklyn; beyond it is Gowanus Bay, and beyond that is Upper New York Harbor.
In this action, GIP complains of a bulkhead (and of a fence and piping on top of the bulkhead) maintained by Hess Corporation ("Hess"). Hess owns real property adjacent to the Henry Street Basin and uses that property as an oil terminal. GIP contends that Hess's bulkheadrests partially on the parcels. It therefore asserts nuisance and trespass claims against Hess, seeking damages and preliminary and permanent injunctive relief. GIP also asks for a declaration that it is the owner of the parcels, including the bulkhead, and that it is entitled to exclusive use and ownership of the bulkhead. Hess, in turn, challenging GIP's claim of ownership to the parcels, seeks a declaration that it owns the bulkhead as well as those portions of the parcels lying beneath and to the east of the bulkhead and seeks an injunction prohibiting GIP from interfering with Hess's use of the bulkhead or attempting to use the bulkhead without Hess's permission. Both parties have moved for summary judgment, each asking the court to grant its claims and deny the other party's claims as a matter of law.1 For the reasons stated below, each party's motion is denied in part and granted in part. Specifically, GIP's claims for trespass and private nuisance are dismissed, as are its claims for declarations that (a) the bulkhead lies within the parcels; (b) GIP is entitled to "sole, exclusive and unfettered use of and access to the Bulkhead"; (c) GIP is entitled to construct a catwalk and related pile clusters on the bulkhead; and (d)Hess has no claim to the ownership or use of the bulkhead. GIP's claim for a declaration that it owns the parcels is granted. Hess's counterclaims are dismissed, except to the extent that it seeks a declaration that it owns the structures that it built and maintains on the property at issue; that declaration is granted as a matter of law.
This action is the second iteration of a dispute that was previously before my colleague Judge I. Leo Glasser in Gowanus Industrial Park, Inc. v. Amerada Hess Corp., No. 01-CV-0902 (ILG). Its background - including a thorough history of the creation and title of the Henry Street Basin - is set out in detail in Judge Glasser's decision on the parties' cross-motionsfor summary judgment in that case, 2003 WL 22076651 (E.D.N.Y. Sept. 5, 2003) ("GIP I"), as well as in several orders issued in this case, see Order Addressing Scope of Hearing, April 18, 2011, ECF No. 22; Gowanus Indus. Park, Inc. v. Hess Corp., No. 10-CV-5522 (JG) (JO), 2011 WL 1841132 (); Gowanus Indus. Park, Inc. v. Hess Corp., No. 10-CV-05521 (JG) (JO), 2011 WL 1431621 (E.D.N.Y. April 8, 2011) (). I recite here only those facts necessary to resolve the motions before me. All facts are undisputed unless otherwise noted.2
The parcels at issue in this case are described in letters patent recorded with the New York Department of State on December 21, 2004. Aff. John Quadrozzi, Jr. Ex. 6, July 14, 2011, ECF No. 37-2 ("Letters Patent"). They include all lands under water at the Henry Street Basin and are bounded on the east by a bulkhead line established in 1875 that runs along the eastern edge of the Henry Street Basin. GIP I, 2003 WL 22076651, at *4; see also 1945 N.Y. Laws Ch. 899; 1875 N.Y. Laws Ch. 398. That bulkhead line also serves as the western boundary of Hess's property, which is known as the Brooklyn Terminal. The parcels were appropriated by New York State in 1912 pursuant to statute, see 1911 N.Y. Laws Ch. 746, and became part of the New York barge canal system. GIP I, 2003 WL 22076651, at *3. The state was prohibited by statute from alienating the appropriated lands, 1911 N.Y. Laws Ch. 746, § 14, but in 1944 the legislature deemed the Gowanus Bay Terminal "no longer necessary or useful as a part of the barge canal system, or as an aid to navigation thereon or for barge canal terminal purposes," 1944 N.Y. Laws Ch. 410, § 2, and transferred to the Port Authority of New York "all the right,title and interest of the state" in the lands that had been appropriated for the Gowanus Bay Terminal, id. § 3. In 1945, the 1944 Act was amended to include the underwater lands at the Henry Street Basin. 1945 N.Y. Laws Ch. 899, § 2 ().3Together, the 1944 and 1945 Acts conveyed to the Port Authority title to the parcels at issue in this litigation.
Under the 1944 Act, the Port Authority held title to the parcels subject to certain restrictions. Although the act was entitled, in part, "An Act providing for the abandonment of a barge canal terminal and barge canal terminal lands," the Port Authority was required to "rehabilitate" the pier properties, and it could not use the lands "for any purpose which will materially and substantially interfere with their use for pier and terminal purposes." Id. § 2(a), (b). The act specified that the Port Authority, in maintaining the pier properties, would be "performing an essential governmental function" by providing "needed transportation and terminal facilities" to the people of New York and New Jersey. Id. § 12. The land was to remain non-taxable. In addition, the Port Authority was prohibited from granting or conveying title to the lands "to any person or legal entity other than the state." Id. § 2(c).
Despite this restriction on alienation, the Port Authority purported to sell the parcels to GIP in 1997 for $3.5 million and to transfer title by quitclaim deed. GIP subsequently initiated the 2001 action before Judge Glasser. It alleged that it held title to the parcels and that the bulkhead constructed by Hess encroached on the parcels and constituted a trespass. On cross-motions for summary judgment, Judge Glasser determined that the bulkhead was partially located within the boundaries of the parcels, GIP I, 2003 WL 22076651, at *7-*9, but he also held that GIP did not own the parcels. He found the attempted 1997 transfer void because thePort Authority was prohibited by the 1944 Act from transferring title to any entity other than the state. Id. at *9. Because Judge Glasser also found that GIP was not in possession of the disputed property, he granted summary judgment in Hess's favor on GIP's trespass claim. Id. at *2. Judge Glasser also considered a claim of ownership by Hess to a portion of the parcels. He held that Hess did not hold title to any portion of the parcels, and that decades-long acquiescence by the Port Authority to the presence of the bulkhead had not shifted the property line to the location of the bulkhead because the Port Authority had taken no action indicating its adoption of a new boundary line. Id. at *7-9.
On November 29, 2004, in response to Judge Glasser's decision, the Port Authority assigned its interest in the parcels to the state by quitclaim deed. On December 21, 2004, the state deeded the property to GIP by letters patent. The letters patent state that the transfer from the state to GIP was made "pursuant to Section 50 of the Public Lands Law and Findings of the First Deputy Commissioner of General Services dated December 15, 2004 and in consideration of the sum of One Dollar ($1.00) and other good and valuable consideration paid by [GIP]." Letters Patent at A-91. The letters patent are signed by Robert J. Fleury, First Deputy Commissioner of General Services, and approved by an assistant attorney general on behalf of Attorney General Eliot Spitzer. Both the quitclaim deed and the letters patent refer to Judge Glasser's 2003 opinion and state an intent to cure the defect he identified. Aff. John Quadrozzi, Jr. Ex. 5 at 1-2, July 14, 2011, ECF No. 37-2; Letters Patent at A-95. The December 15, 2004 findings also cite Judge Glasser's opinion and state that GIP applied to the State Office of General Services "requesting that the State of New York ratify or confirm title in GIP." Charles S. Sims Letter Ex. A, March 30, 2011, ECF No. 12 ("Dec. 15 Findings").
By deeds executed in1940 and 1942, Ira S. Bushy & Sons, Inc. ("Bushy") acquired from the estate and heirs of Jeremiah P. Robison title to the land referred to here as the Brooklyn Terminal, the western boundary of which is the eastern bank of the Henry Street Basin. Bushy became a wholly-owned subsidiary of Hess in 1977, and Hess now holds title to the Brooklyn Terminal. Hess's title includes lands and structures along the eastern side of the Henry Street Basin, including a pier known as the finger pier, extending 500 feet southward into the Gowanus Bay. Since acquiring Bushy in 1977, Hess has operated an oil depot on the Brooklyn Terminal property. Oil is offloaded from vessels docked at the finger pier into pipelines for transport to three above-ground storage tanks, which are located on Hess's property within thirty feet or less of the Henry Street Basin. From there, the oil is piped into trucks for delivery to homes and businesses throughout the New York City metropolitan area. The oil tanks were constructed by Bushy or its tenant, Patchogue Oil Co., and were in place by the 1960s.
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